Terminate the Award Order and Save Thousands of Dollars

January 2019 |
Faraaz Jindani, Associate

An award order is a legal directive issued by the Virginia Workers’ Compensation Commission (“Commission”) requiring the employer and insurance carrier to pay workers’ compensation benefits to a Claimant. However, during the life of a claim, a Claimant’s condition may change warranting a termination of the award order which could lessen the overall exposure of the claim.

How do you terminate an award order? There must be a basis to move the Commission to terminate the existing award. The following conditions can form a basis for termination:

Claimant returned to pre-injury work;

Claimant was released to full-duty work;

Claimant returned to light-duty work;

Claimant’s disability is unrelated to the work accident;

Claimant failed to report for an independent medical examination;

Claimant refused selective employment;

Claimant failed to cooperate with vocational rehabilitation efforts; and

Claimant refused medical treatment by a treating physician.

Among these conditions, we tend to find that the more common reason for moving to terminate the award order is that the Claimant has returned to work in some capacity. Because the Claimant returns to work and begins earning wages, there is no need to terminate the award order, right? Well, the Commission begs to differ on this issue.

Collado v. Fairfax County Maintenance & Stormwater Management , JCN No. VA00000966406 (September 18, 2018), shows the repercussions of not moving to terminate the award when the Claimant returns to work. The facts illustrate that an award order was entered providing for payment of temporary total disability benefits to the Claimant beginning August 22, 2014. Thereafter, the Claimant returned to work on December 2, 2014 earning his pre-injury wage. In response, the employer and insurance carrier unilaterally suspended payment of the workers’ compensation benefits without filing an agreement or application to terminate the disability benefits. The employer and insurance carrier defended the claim on the grounds that 1) they had the right to unilaterally suspend the payment of compensation upon Claimant’s return to work and 2) the Claimant was paid compensation in lieu of wages due to his return work.

The Commission held that the employer and insurance carrier did not have the unilateral right to cease paying compensation benefits to a disabled employee under an outstanding award, when the employee returned to work and the employer or carrier did not file an application [for hearing] or [termination of wage loss award form]. In other words, an employer who failed to comply with an outstanding award was not entitled to be excused from paying past due benefits and penalties simply because the Claimant returned to work at wage equal to or greater than his pre-injury wage. As well, any wages the Claimant earned from returning to work was not considered compensation pursuant to the award order. Consequently, the Commission awarded the Claimant accrued compensation totaling $73,287.10 along with a 20% penalty in the amount of $14,657.42.

The Collado decision shows us the harsh reality of unilaterally suspending an award order without following the proper procedure in terminating the award order. Thus, a simple oversight by not moving to terminate an award order can increase the exposure of a claim dramatically. Collado reminds us to be more proactive with our cases and to continue monitoring any changes in the condition of the Claimant. Finally, it emphasizes an open line of communication with employer representatives, insurance carriers, and counsel so that all the parties can work together to prevent a Collado situation from occurring as it could potentially save thousands of dollars on a claim.